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Clearing the Air
Topics: Environment-Weather and Climate ChangeInnovation and Invention-GeneralScience-Science-Based Business

Clearing the Air
Topics: Environment-Weather and Climate ChangeInnovation and Invention-GeneralScience-Science-Based Business
Clearing the Air
When the United States Congress passed the Inflation Reduction Act in the summer of 2022, it was heralded as a landmark investment in the environment. “This bill is the biggest step forward on climate ever,” President Joe Biden said when he signed the legislation, which included $369 billion for efforts such as advancing clean energy, curbing pollution, and incentivizing consumer adoption of environmentally friendly technology. Little noticed in the headlines, however, was the change to IRS Section 45Q—a revision that experts believe is likely to make the US a technological leader in the still-nascent carbon capture industry.

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“The impact of the Inflation Reduction Act is enormous. I think it really hasn’t hit home yet,” says Jonas Lee (MBA 1993), chief commercial officer at CarbonCapture Inc., which is planning a carbon capture facility in Wyoming expected to pull 5 million tons of carbon from the atmosphere annually. The revised Section 45Q substantially increases subsidies for direct-air capture (DAC), which removes carbon dioxide already in the atmosphere, and makes the incentives available to smaller companies—changes that Lee believes will help the sector scale rapidly. And investor interest is rising in both the public and the private sector: In December, the US Department of Energy announced $3.7 billion worth of programs and prizes meant to further kick-start the industry; In April, payments giant Stripe launched the Frontier Fund—with financial contributions from Alphabet, Shopify, McKinsey, and Meta—committing $925 million to advance carbon removal technologies.
There’s a lot of work to do. As of 2022, there were 13 commercial carbon capture and storage facilities in the United States—most associated with the oil and gas industry—and another 12 globally with the estimated ability to remove 40 million metric tons of CO2 from the atmosphere each year. Meanwhile, human activity adds about 51 billion tons of carbon dioxide to the atmosphere every year. The UN’s climate change commission, the Intergovernmental Panel on Climate Change (IPCC), has set a goal of net-zero emissions by 2050. To accomplish that, the National Academies of Sciences, Engineering, and Medicine has estimated the world needs an additional 10 billion tons of CO2 removed each year through various mitigation strategies, including DAC, but it also has cited cost, difficulty of scaling, and the need for scientific advancement as significant obstacles to the DAC industry.
What will it take for the sector to overcome those challenges and help the world combat climate change? And what opportunities will be created by the need to store or reuse that captured carbon? We asked the experts: HBS senior lecturer Jim Matheson, a cleantech investor; current HBS student Aaron Sabin (MS/MBA 2023), a budding entrepreneur in the sector; Meghan Kenny (MBA 2019), the head of CarbonCapture Inc.’s Project Bison, the largest DAC effort currently underway in the United States; and Todd Brix (MBA 1997), whose company, OCOchem, is finding new ways to reuse captured carbon.
“We have got to start finding ways to actively remove greenhouse gases from the atmosphere if we’re going to win this race.”


“We have got to start finding ways to actively remove greenhouse gases from the atmosphere if we’re going to win this race.”
Why does carbon capture matter? Why do we need this technology?
Carbon emissions are really a math problem. As we know from the IPCC report, the challenge is trying to limit atmospheric temperature rise to 1.5 degrees Celsius, and that means that we have to not only stop the increase of greenhouse gas emissions, but also drive those emissions down to zero by 2050. Even then, we’re still going to have a huge amount of greenhouse gases in the atmosphere, so we have got to find ways to actively remove these gases—CO2 specifically—from the atmosphere if we’re going to win this race.

Jim Matheson is a senior lecturer at HBS, a special partner at Engine, a venture firm focused on tough tech, and a senior advisor and venture partner at Breakthrough Energy. He has spent the last 15 years of his career focused on climate and sustainability technology ventures.
What are the main options in the market?
The first way to capture pollutants is at the source, whether it’s in an automobile or at a power plant. It’s also the easiest way to do it, because you have a concentrated source of the molecules you’re trying to gather.
Next, we have direct-air capture, which is essentially capturing CO2 in the ambient atmosphere. The density of those molecules is much lower, so it’s a much more difficult energy-mass problem. And energy-mass challenges turn into cost problems in the end. So it’s really about asking, Can we capture these molecules in a cost-effective way?
It’s interesting and exciting to see the recent proliferation of invention and witness new approaches and experimentation around carbon capture, which is exactly what we need. Because, as we sit here today, it’s not clear that we have a viable technology solution that’s going to allow us to capture carbon with economics that the markets are going to bear. That’s the core challenge. Can we find solutions that can scale quickly enough to start allowing us to make some headway against CO2 emissions and do it at a cost point that’s going to work in the marketplace?
You’ve noted that carbon capture is only one part of this value chain. What are the other opportunities?
More broadly, the opportunity is carbon capture, sequestration, storage, and reuse. We’ve talked a bit about why we need to capture CO2, and we’ve talked very briefly about how we might do that. Now, the tricky thing is that once you capture these molecules, you actually have to make sure that they don’t get released again in the future, or else all that good work and all the costs that you incurred are for naught.
So we’ve got to find a way to sequester, store, or reuse carbon in such a way that it can’t be rereleased. That’s both a practical consideration but also an economic consideration, because you need a credible measurement and verification process that says, yes, in fact, you did capture these molecules and they can be sequestered or reused in a way that they’re not going to then be rereleased. If we don’t measure and verify that we’re actually containing the CO2 molecules, then the economic mechanisms and the contracts about carbon trading won’t work.
“We are at a tipping point.”


“We are at a tipping point.”
What makes Project Bison different from other DAC projects?
Project Bison is going to be one of the first large-scale DAC projects deployed in the United States. At full capacity, which we hope to reach by the end of 2030, Project Bison will capture and store 5 million tons of carbon dioxide annually [in partnership with Frontier Carbon Solutions, a sequestration company].

Meghan Kenny (MBA 2019) is the director of strategy and projects for CarbonCapture, Inc. She is currently overseeing the development of Project Bison, a planned direct air capture (DAC) facility in southwest Wyoming.
Our strategy is focused on what we’re calling “modular open system architecture.” We are trying to build as much modularity into our system as possible so that we can learn and iterate quickly. Our understanding is that the best capture media, or sorbent, hasn’t been invented yet. This system should be able to handle most of the things that we throw at it in its 30-year-or-so lifetime.
How far along are you in this project?
We have a prototype up and running in our headquarters in downtown Los Angeles, which is where we plan to make the first couple of units. Then we’re going to find a manufacturing facility so that we can build and deploy these, en masse, in Wyoming. Project Bison will be deployed over four major phases. In phase one—2023 to 2024—we are aiming to deploy about 10,000 tons of capacity. Phase two will be 2025 to 2026, when we will increase to about 200,000 tons of capacity. In phase three, 2027 to 2028, we’ll reach about a megaton. And 2029 to 2030 is when we’ll deploy the remaining capacity.
This is a pretty ambitious project. We understand that our timeline is fast but we think it needs to be.
Why is this ambitious timeline so important?
I don’t think that we, as a world, can afford to wait to deploy DAC or other carbon-removal technology. I think we need to try anything, even if it’s not necessarily the best technology. The best way that we can learn, and the best way that we can start combating what is already a crisis, is to get modules out into the field as quickly as possible.
Can the sector as a whole grow quickly enough to meet the need?
I am definitely optimistic. Given all of the investment in this space, we are at a tipping point. Right now, the only people who can really afford credits [to offset emissions] are funds like Frontier and the Microsofts of the world—organizations that want to encourage growth and development. But costs will naturally come down over time, the way most industrial manufacturing works, and a lot of companies and investors really want to see this work. It’s going to take only a couple of successful projects to tip that over the line.
“We have to invent new molecules.”


“We have to invent new molecules.”
You spent last spring and summer trying to build out a company that employed an electrochemical direct-air capture process, but ran into challenges. What hurdles did you face?
I was working very closely with two Harvard professors, Mike Aziz and Dan Schrag, and we were essentially trying to figure out, Can the technology that we have here scale? Can it work in the market?

Aaron Sabin (MS/MBA 2023) is working on a startup in the direct air capture space, focused on discovering materials that will make carbon capture more efficient. His company, Carbon Vacuum, won the 2022 New Venture Competition’s Tough Tech Prize.
The core of that work is called a techno-economic analysis—basically modeling out what the process would look like in a big plant. If we were to scale it up to that, what are the costs and what are the revenues? So you’re thinking about energy, you’re thinking about materials, you’re thinking about capital costs. You’re thinking about, once we have the carbon, how do we sequester it? How much does that cost? And for that process, I determined that a baseline cost was right around $400 per ton. For reference, we’re trying to get below $100, because that’s the price where we think we can have real impact. We would’ve had to pull some significant levers to get it to that range, and that’s why I decided to pivot from that concept.
I don’t believe that we can just take existing processes for capturing carbon dioxide directly from the air and improve them through optimizing the chemical engineering process. The fundamental bottleneck that controls the economics of direct-air capture is the chemistry: How much energy do you have to pass into these chemicals to release the CO2 from them? How much does it cost to manufacture them? How long does it take them to absorb CO2? There are fundamental chemical issues that you have to work through.
We have sorbents, like calcium hydroxide, which are molecules that naturally absorb carbon dioxide. Our planet has been using them for millions and billions of years. But we have invented a problem in the last 150 years that will require a solution much more quickly than that. And we can’t rely on cycles of 200 million years, as with calcium hydroxide; we have to invent new molecules. We engineered our way into the problem; we have to engineer our way out of it.
How do we find these new molecules?
Unfortunately, we can’t simulate molecules the same way that we simulate larger physical objects because we don’t yet have quantum computers, which are required to simulate the interactions between atoms. But what we can do is simple experiments and simulations to predict important properties of molecules, like how much it might cost to synthesize. The other part is using machine learning to connect the dots between what you’ve observed in the real world and how you predict you’d fill out the rest of those properties that are important to you. Then you use that to invent molecules we haven’t yet used for direct-air capture.
What gives you confidence there’s a market for these solutions?
So, at HBS and elsewhere, they’ll teach that you don’t want to find a nice-to-have problem; you really want to find a hair-on-fire problem. Climate change is a world-on-fire problem. Now, our economic system doesn’t reward cleaning up other people’s messes, but the private sector has stepped in and set up that market. The Frontier Fund, for example, is committed to advanced purchases of carbon removal, and they’ve committed a billion dollars to kick-start the growth of companies, get them down the cost curve, and get them innovating, knowing that they’ll get funded up front.
What we’re hoping for—and what we just have to assume is going to happen—is that governments are going to follow suit. They already have, to some extent, in the United States. The Inflation Reduction Act increases certain tax credits for direct-air capture and California’s Low Carbon Fuel Standard enabled the creation of what is essentially a carbon market in California.So we’re seeing these things start to form, but we have to increase supply to make it real—because they can form funds and give tax credits, but if there’s no one there to take them and to capture the CO2, it doesn’t matter.
“The economics are shifting toward these more sustainable approaches.”


“The economics are shifting toward these more sustainable approaches.”
How does OCOchem’s technology reuse carbon dioxide?
This is what plants have done, day in and day out, for the last 3.4 billion years on Earth: they make pretty much any kind of molecule on the planet from carbon dioxide and water. So if the plants could figure that out, then certainly today—with 21st-century technology—we could try to do at least as well.

Todd Brix (MBA 1997) is the cofounder and CEO of OCOchem, a Washington-based company developing and scaling technology to convert carbon dioxide into formic acid, a widely used chemical.
We’ve built a device that converts carbon dioxide and water, using electricity and a catalyst, into a platform molecule called formic acid. The easiest place to get that carbon dioxide today is through bio-fermentation, but the long-term goal is to be able to extract carbon dioxide from industrial emission sources and through direct-air capture.
What is the market for formic acid made from carbon dioxide?
The number-one use for formic acid today is as a silage preservative, for the hay and alfalfa that cows and other animals eat over the winter months. And that will be one of the markets where we will first sell our formic acid, for sure, but that alone isn’t of sufficient interest, in terms of its size to justify an investment like this.
We are also looking at two alternative markets. The first is using formic acid as a means of making other chemicals, the precursors of plastics, road materials, and a wide variety of other products. The second is using formic acid to transport green hydrogen. Instead of moving hydrogen as an explosive, compressed gas, we think formic acid can be used as a liquid hydrogen carrier. We have a number of customers very interested in that approach.
When the hydrogen is released, the carbon dioxide is released, too. So OCOchem is not pursuing the permanent removal of carbon dioxide from the atmosphere.
We set the bar at nature. Plants breathe in carbon dioxide, and they extract water from the soil to make a variety of molecules. But then when the plant dies, carbon dioxide is inevitably released. It’s a circular carbon economy; there’s no net increase of carbon dioxide emissions in the atmosphere, and that’s what we aspire to.
And making formic acid from carbon dioxide also reduces carbon dioxide emissions because the existing way of making formic acid uses fossil fuel–based methane.
Do you expect to see interest in carbon conversion—as opposed to sequestration—grow?
For a long time, I think there was the assumption that any carbon dioxide we might capture we’d bury in the ground. But that’s just cost, and it doesn’t decarbonize anything else. So over the last couple of years, we’ve realized we should be aspiring to make green molecules out of carbon dioxide. The problem has been that there was lack of technology, a lack of corporate focus, and a lack of policy support at the governmental level. And all three of those things have changed.
Right now, technologies we once considered far too costly are becoming increasingly more competitive. The economics are shifting toward these more sustainable approaches. That’s important, because if you don’t have an economically sustainable business model, the environmentally sustainable model you create won’t necessarily stand on its own.
These interviews have been edited for length and clarity.
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